BMW studying sites for £500m Rolls-Royce car plant in Britain

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The Independent Online

The German company BMW is studying several sites in England as potential locations for a new £500m plant to build Rolls-Royce cars and is expected to make a decision within the next six months.

The German company BMW is studying several sites in England as potential locations for a new £500m plant to build Rolls-Royce cars and is expected to make a decision within the next six months.

Hendrich Heitmann, the BMW board member for sales and marketing, yesterday described reports that the plant would be located close to Heathrow airport in West London as "unfounded rumour".

Speaking on the opening day of the London Motor Show at Earls Court, Mr Heitmann said BMW was looking at a number of locations, all of them in England. One is thought to be the Rover Oxford site at Cowley, which used to manufacture body assemblies for Rolls-Royce and has a large amount of surplus land.

BMW sources confirmed that the final location could just as easily be a "brown field" site as an entirely new facility.

BMW will take control of the Rolls-Royce marque from the rival German car maker Volkswagen in 2003. VW bought Rolls-Royce from Vickers for £470m last year but under an agreement with BMW will only retain the Bentley brand long-term. Meanwhile, Mr Heitmann insisted that BMW was pleased with sales of the new Rover executive car, the 75, despite suggestions that UK demand had been sluggish.

Rover said it would manufacture 60,000 of the R75 this year, against an original forecast of 40,000 and would reach full production at Oxford of 2,500 cars a week early next year. The company expects the launch in the UK yesterday of the bottom-of-the-range "Classic" 75 model, priced at £18,250, to help lift sales.

Rover also unveiled revamped versions of the 200 and 400, called the 25 and 45, at the show. Mr Heitmann said that the restructuring at Rover, which has seen the workforce decline by 8,000 in the past 12 months, was largely complete and it remained on target to break even in 2002. However, he had a warning for Rover's UK suppliers, who are at loggerheads with BMW over its demands that component firms cut their prices by 10 per cent and invoice in euros.

Pointing out that the pound had risen from DM2.70 a year ago to nearly DM3 now, he said: "We have to source components where we get the best value for money. If that cannot be achieved here then we will have to go abroad."

Separately, the Consumers' Association yesterday invited visitors to the show to protest over the "great British car rip-off". A special stand complete with hotlines direct to car manufacturers' headquarters has been set up at Earls Court by the association to enable car buyers to protest directly.

Visitors to the show will also be able to register with the association's new car importing scheme, set up to enable British consumers to buy cheap, right-hand drive cars from the Continent. Vauxhall has launched its own, online initiative, to cut prices, offering savings of £1,000 on special editions of its Corsa, Vectra and Astra ranges to consumers who buy their cars through the Internet.

Meanwhile, Vauxhall has commissioned the Lotus Group to manufacture a new high-performance sports car at its Hethel plant near Norwich. The car, known as the Vauxhall VX220, will cost around £23,000 and will go into production next summer, helping raise Lotus' output from 3,800 cars a year now to as many as 10,000.

Lotus, which was formerly owned by Vauxhall's parent company General Motors but is now part of Proton of Malaysia, confirmed that the agreement with Vauxhall would create new jobs but declined to give a figure. The group currently employs 1,850.

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